NBN costs Australian taxpayers

24 times South Korea at one tenth

the speed: report says @ $40billion

Australia’s national broadband network will cost taxpayers 24 times as much as South Korea’s but deliver services at just one-tenth the speed, new research claims.

The opposition claimed the research vindicated its position that the NBN was a waste of public funds, while the government countered that comparing Australia to South Korea was “like comparing apples to oranges”.

The research from the Economist Intelligence Unit published today shows Australia is spending an estimated 7.6 per cent of annual government budget revenues on its broadband network.

“In South Korea, by comparison, the government is spending less than 1 per cent of annual budget revenues to realise its broadband goals, achieving targets by encouraging the private sector to invest in the country’s broadband future,” the Economist Intelligence Unit said in a statement.

However, the EIU report does not mention NBN Co’sannouncement last year that its network will also be capable of the same speeds as South Korea’s network. Shortly before the federal election, chief executive Mike Quigley announced the fibre network would be built to carry speeds of 1 gigabit per second in a bid to differentiate the project from the opposition’s broadband policy.

The opposition seized on the report, with its communications spokesman Malcolm Turnbull saying that the Economist Intelligence Unit had “joined the long list of expert observers, both international and local, who are utterly dismayed by the reckless spending of the Gillard government on the NBN”.

“The study confirms, yet again, that this NBN project should be the subject of a rigorous cost benefit analysis by the Productivity Commission.”

“Investment in Australia’s road, rail, telecommunications and utility infrastructure faces vastly different factors than countries such as South Korea,” the spokeswoman said.

“We know that with Australia’s population density, there aren’t the incentives for the private sector to provide the universal high quality broadband infrastructure that all Australians need.”

Conroy’s spokeswoman also noted that Australia’s land mass was “over 7.6 million square kilometres compared with South Korea’s which is just over 100,000 square kilometres” and that Australia had a population density of “2.7 people per sq km compared with 487 people per sq km for South Korea”.

The report also claimed that while Australia’s network scored highly for setting an original target speed of 100Mbps, Sweden, Finland, Estonia and France planned to achieve similar targets with much lower public-sector funding.

The study reviewed more than 40 national government plans for broadband development. Australia scored 3.4 out of five on the index. It punished Australia for the “huge cost to the public sector of its broadband scheme”.

Other factors that worked against Australia were “limited private-sector involvement, heavy central-government intervention and the exclusion of state and municipal authorities from its plan”, the Economist Intelligence Unit said.

Internet Armageddon

is all my fault:

Google chief says….

Asher Moses and Ben Grubb

The “father of the internet” says the world is going to run out of internet addresses “within weeks” – and it will be all his fault.

Google’s chief internet evangelist, Vint Cerf, who created the web protocol, IPv4, that connects computers globally, said he had no idea that his “experiment” in 1977 “wouldn’t end”.

“I thought it was an experiment and I thought that 4.3 billion [addresses] would be enough to do an experiment,” he said in group interview with Fairfax journalists.

The protocol underpinning the net, known as IPv4, provides only about 4 billion IP addresses – not website domain names, but the unique sequence of numbers assigned to each computer, website or other internet-connected device.

The explosion in the number of people, devices and web services on the internet means there are only a few million left.

The allocation of those addresses is set to run out very shortly but the industry is moving towards a new version, called IPv6, which will offer trillions of addresses for every person on the planet.

“Who the hell knew how much address space we needed?” Cerf said.

“It doesn’t mean the network stops, it just means you can’t build it very well.”

Today the company announced that Google co-founder Larry Page would take over as chief executive from Eric Schmidt, who has become its executive chairman. Until this point Page and co-founder Sergey Brin ran the company with Schmidt as a “troika”.

“‘As we got larger it was harder for us to move as quickly as we would like so I think this is part of the whole practice of speeding up decision processes,” he said.

“Quick rapid execution is absolutely essential, especially in a highly competitive world like this.”

Recent ex-Googlers who left the company to join Facebook, including former Google Australia engineer Lars Rasmussen, have said Google has become too unwieldy as it has grown.

Schmidt gave similar comments in a blog post today, saying that, as Google had grown, managing the business had become “more complicated” and the trio had been “talking for a long time about how best to simplify our management structure and speed up the decision making process”.

Cerf said Schmidt, 55, had been chief executive for 10 years – “a nice round number” – and Page, now 37, was ready to lead the company well into the future.

“Larry and Sergey are 10 years older than they were when they thoughtfully hired Eric to be the CEO … so everybody’s growing up,” Cerf said.

“He was the only guy that stood up to them – these were two young, smart, incredibly brilliant guys who literally had just dropped their PhDs to go start this company.”

It has long been held that Schmidt was brought on at Google to counter the lack of business experience of Google’s founders, and Schmidt alluded to this in a tweet today.

“Day-to-day adult supervision no longer need!” he wrote after the leadership change announcement.

Taking on Facebook

Cerf would not be drawn on whether Google was developing a social networking site to compete with Facebook, as has been rumoured. But he said “our interest is less in the social networking aspect as it is in the patterns of behaviour”.

“We really don’t care about you personally we care about the patterns that you make. If we can match the patterns that you make with the patterns that the advertisers are trying to get in front of you, you benefit as well as the advertisers,” he said.

“This is quite independent of the sort of things that go on in Facebook, which is more about personal information and personal interactions.”

Praising the NBN

Cerf heaped praise on the National Broadband Network, saying Australia was making a long-term investment that would “serve you incredibly well in ways that even I can’t figure out”.

“The idea of being able to export your talents without having to export your people … this is a very attractive proposition,” he said.

“I honestly envy the political will to make this kind of long-term investment.”

Google as ISP?

But despite Google’s work in building municipal Wi-Fi and experimental fibre broadband networks in the US, he said it was unlikely Google would ever become an ISP.

“The intent is that as we build these [networks] out we will then turn them over to some other parties to operate and to make openly accessible,” he said.

“This is not our business model. Our purpose was to document what the costs and problems are … we’re not in the business of building physical infrastructure except for our internal operation.”

Asked whether recent privacy breaches at Sydney University and Vodafone – both of which kept detailed customer records online – highlighted the pitfalls of moving toward hosting everything in the online “cloud”, Cerf said the cloud was not at fault.

“Just because it’s sitting in an enterprise server doesn’t mean that you’re any better protected than you would be in the cloud,” he said.

“When you’re in the cloud business you better be good at protecting and securing your systems otherwise you lose all your customers.”